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Protecting your business from dishonesty

Category: Blog & News

In last week’s article (citing the great George Costanza from Seinfeld) I covered how we are all prone to dishonesty but will tend to lie only to the extent that allows us to maintain a positive self image’ the “Fudge Factor”. To protect your business from dishonesty this means expecting a large volume of small transgressions rather than hunting for a few bad apples.

And the bad news is that just being in a business context might make dishonesty more likely. Researcher Ann Tenbrunsel from Notre Dame studies ethical decision-making(1) and has found that when research subjects were asked to think about an ethical dilemma, and later given an opportunity to cheat they were less likely to do so compared with people asked first to think about a business dilemma. In other words, the business context can itself prime us to behave less ethically.

To design your business in a way that minimises dishonesty here are some tips from behavioural science.


Someone is watching

A well known study by Ernest-Jones, Nettle & Bateson (2011) tested the theory that we behave differently when we think we are being watched, including being more honest and more cooperative. Placing an image of a pair of eyes on a tearoom’s honesty box resulted in people paying 2.76 times more than when the image on the box was flowers. Posters of eyes in a self-cleaning cafe also prompted people to clear away their rubbish more often than posters of flowers.

Using this insight that we act more correctly when we think we are being watched, the Boston Police were recently in the news for placing a cardboard cut-out of one of their officers in the subway to reduce incidence of theft. The result? Bike thefts down 67%.


Remind people of their honesty

Typically we are asked to sign forms at the end of the document, attesting to the accuracy of the answers provided. Research by Shu, Mazar, Gino, Ariely & Bazerman (2012) suggests that a better way to encourage honest responses is to have people sign the form upfront. Why? It forces us to think about our values and proclaim ourselves honest first, increasing the likelihood that our subsequent answers will be consistent with that position. In effect, we don’t like the uncomfortable internal tension that results when our behaviour is not congruent with our perception of ourselves and will seek to avoid it.


Priming the work environment for honesty

The workplace environment can also cue honesty. Now I’m not suggesting you need to install blue lighting in your office to cut crime, but that’s what is happening on some streets in the UK as a way of subconsciously reminding people that the police are watching.

More appropriately you may like to consider the findings of Schom & Maurhart (2009) who investigated whether they could encourage people using toilets along the motorway to pay the fee requested. Placing a poster with a mirror image of the word “honesty” in bathrooms was found to significantly increase the amount paid, even without the word itself being legible. This suggests that workplaces where honesty and ethics are part of the scenery could have a positive effect, albeit processed deep within our subconscious minds.

This article also appeared in Smartcompany.

(1) Cited http://www.npr.org/2012/05/01/151764534/psychology-of-fraud-why-good-people-do-bad-things

Image from http://www.rgbstock.com/photo/mC2GnGQ/eyes

P.S. This content was based on a presentation I gave to finance professionals at CPA Congress. Why not have me along to speak with your team about how behavioural strategies can improve your business? More info about my seminars here.